The role of hepatitis B virus (HBV) in human cancer is being investigated by i) developing recombinant human cell lines that carry and express HBV genes providing in vitro models to study the interaction between HBV and human cells; and ii) HBV risk-group patients, lymphocytes and nucleic acids are being analyzed for the presence of HBV. The development of a recombinant human epithelial cell line (GTC2) that contains only the HBV core antigen gene (HBc) provides a model system to study the regulation and expression of an HBV gene required for virus replication. The discovery that HBc gene expression is cytopathologic when expression reaches maximal levels, and the observation that 5-methylcytosine and nutritional factors regulate the expression of the HBc gene indicates that the role HBV infection plays must include the promotional effect of increased cell division following the direct destruction of liver cells. HBc gene expression in human epithelial cells is controlled by the methylation of an Hpa II site located 280 base pairs upstream from the structural gene. The detection of replicative forms of HBV in lymphocytes from chronic active hepatitis (CAH) and acquired immunodeficiency syndrome disease (AIDS), and the stimulation of HBc gene expression when GTC2 or PLC/PRF/5 cells are treated with 100 u of alpha interferon (a-IFN) suggest that HBV may have a cytolytic effect during the infection of lymphocytes that is important to the immunological abnormalities frequently associated with HBV infection.